Bankruptcies Trending Down in West Virginia, but for How Long?
"Then from June 2020 to June 2021, in the heart of the pandemic, those numbers dropped even more."
Why this is important: From 2016 to 2019, there was an average of 783,000 bankruptcy filings throughout the United States. In 2020, that number decreased to 544,463. In 2021, there have been approximately 300,000 cases filed through the end of August. The precipitous drop in cases across the country also is occurring in West Virginia. Indeed, according to bankruptcy attorneys, “West Virginia’s bankruptcy filings were trending down anyways,” and there were 776 filings in the Northern District for the 12 month-period that ended in June 2021 (down from 1,322 in 2016). Likewise, the Southern District saw a drop from 1,942 cases in 2016 to 1,100 in June 2021. Lawyers attribute the drop to a combination of the declining population, the additional funds paid to individuals on unemployment, the moratorium on various payments, and the decrease in layoffs. While it is anticipated that filings will “level off soon and start trending upward,” until then, the decrease in filings has a far-reaching impact as decreased filings means decreased creditors’ rights work and fewer workouts, continued uncertainty for individuals who are delinquent when the moratoriums end, and how the continued issues ultimately will impact businesses and commercial real estate.
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